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Daily Technical Round-up: DAX looking for respite after poor week

Michael Baker, Friday, 31 May 2019

Technical Analysis

GBPUSD

Pivot: 1.2610

Scenario 1: Cable continues to hold down by the lows. Market may be open to a further push down, we are within touching distance of a long-term trend support (1.2551). If this fails to hold then we look at 1.2480/34, which is the December 18/January 19 lows. We would be in an area not seen since April 17 if that area gives way, 1.2366 acted as support back then.

Scenario 2: Looking for some short-term breaks to the upside to take the pressure off the downside. 1.2748/87 has been holding moves higher since we broke down on 17 May. Above here we can start to target 1.2852/2865 and then the 200-day SMA at 1.2953. Moves to the upside seem very unlikely without a Brexit compromise.

Chart: Daily chart showing the possible trend support and the Dec 18/Jan 19 lows. Moving further and further away from the 200-day SMA.

31 GBP

EURUSD

Pivot: 1.1129

Scenario 1: Continuing to drive down. 1.1118/05 has held four daily lows since 26 April. Looking at lower wedge line support at 1.1042 if we fall further. Longer-term downside target between 1.0849/25 which traded back in early May 2017.

Scenario 2: Four-hour chart has trend resistance from 30 Jan, looking to push back above 1.1196/1258. 50-day SMA at 1.1211 which has been effective in resisting moves higher since April. 1.1264 has resisted six daily highs.

Chart: Daily chart showing the recent yearly lows, looking ever so heavy with the lower wedge support coming into focus.

31 EUR

Germany 30

Pivot: 11,899

Scenario 1: After breaking out of the trend channel we now continue to head south. 11,688 was a major support back in early 2018 followed by a 38.2% fib at 11,613. 11,506 is a gap left back from the 29 March which may attract attention.

Scenario 2: Strong down week for the Germany 30, looking to get back above 11,813 for a bit of respite. 23 May low turned into a resistance for the 30 May high at 11,926. Trend resistance comes in at 12,000.

Chart: Daily chart shows market breaking out of the trend channel with major fibs coming into focus.

31 DOW

Wall Street

Pivot: 25,148

Scenario 1: Currently in a major support area between 24,990 and the major 38.2% at 24,760. Below here we look for 24,414/226 which has held six daily lows in January. This level sits above the 50% at 24,155.

Scenario 2: Equities very heavy this week, buyers will want this to get back above 25,217/346. 25,527 is a trend resistance which may signal further strength if we break. 25,613 is the weekly pivot but we are far from here and the markets are signalling further downside.

Chart: Daily chart showing the push into major support with the 38.2% not far off. Trend resistance from the May highs holding on 3 occasions.

31 DOW

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